Source: Kiplinger
This article was originally published on Kiplinger – https://www.kiplinger.com/
State Income Taxes: There’s no state income tax, so salaries, wages, Social Security benefits, IRA distributions and pension income are not taxed. But Tennessee does have the Hall Tax, which taxes dividends and some interest at 4% (in 2017). The first $1,250 in taxable income for individuals ($2,500 for joint filers) is exempt. The rate is declining 1% a year and will be phased out entirely by 2021.
Sales Tax: 7% state levy. Localities can add up to 2.75%, with an average combined rate of 9.46%, according to the Tax Foundation. Groceries are taxed at 4% by the state, plus whatever local rate is in effect. Local taxes are limited, though: Only the first $1,600 of any item is taxable.
Property Taxes: The median property tax on Tennessee’s median home value of $142,900 is $1,066.
Inheritance and Estate Taxes: As of January 1, 2016, Tennessee no longer imposes an inheritance tax. The state also does not have an estate tax.
For details on other state taxes as well as state tax breaks for retirees see the complete guide to taxes on retirees in Tennessee.
